Item 1. Business
We are a blank check company incorporated
on September 15, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout
this Form 10-K as our initial business combination.
The registration statement for the Company’s
initial public offering was declared effective on January 12, 2021 (the “Initial Public Offering”). On January 15,
2021 the Company consummated the Initial Public Offering of 27,600,000 units (the “Units”), including 3,600,000 Units
sold pursuant to the full exercise of the underwriter’s option to purchase additional Units to cover overallotments. Each
Unit consists of one share of Class A common stock, $0.0001 par value per share (the “Class A Common Stock”), and one-third
of one redeemable warrant (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase
one share of Class A Common Stock at an exercise price of $11.50 per share, subject to adjustment. The Units were sold at an offering
price of $10.00 per Unit, generating gross proceeds of $276,000,000 (before underwriting discounts and commissions and offering
expenses).
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 5,013,333 warrants (the “Private Placement Warrants”) at a price
of $1.50 per Private Placement Warrant in a private placement to HL Alliance Holdings Sponsor LLC (the “Sponsor”),
generating gross proceeds of $7,520,000.
Following the closing of the Initial Public
Offering on January 15, 2021, an amount of $276,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the
Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”),
located in the United States and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in
any open-ended investment company that holds itself out as a money market fund selected by the Company meeting certain conditions
of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business
Combination and (ii) the distribution of the funds held in the Trust Account, as described below.
Our Sponsor is HL Alliance Holdings Sponsor
LLC, an affiliate of Hamilton Lane Advisors, L.L.C., the managing member of which is Hamilton Lane Incorporated (Nasdaq: HLNE)
(“Hamilton Lane”), a leading alternative investment management firm providing innovative private markets solutions
to sophisticated investors around the world. Dedicated to private markets investing for 29 years, Hamilton Lane currently employs
over 440 professionals operating in 17 offices throughout North America, Europe, Asia-Pacific and the Middle East. Hamilton Lane
had approximately $657 billion in assets under management and supervision, composed of approximately $76 billion in discretionary
assets and approximately $581 billion in advisory assets, as of December 31, 2020.
We intend to identify and consummate an
initial business combination that we believe will generate attractive long-term returns for our shareholders. While we may pursue
acquisitions in any industry or geography, we intend to avoid companies in highly cyclical sectors such as upstream and midstream
energy, commodities or real estate.
Acquisition / Investment Criteria
Ahead of discussing our business strategy
and how we expect to be able to extract value from the market opportunity described above, we have outlined the following general
criteria and guidelines that we believe are important in evaluating prospective targets for our initial business combination. We
aim to utilize these criteria in evaluating acquisition opportunities, but we may decide to enter into our initial business combination
with a target that does not meet some or all of these criteria. Our investment criteria guides us to look for a target company
with the following characteristics:
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Market-leading company with a sustainable competitive advantage
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Excellent management team that shares our vision for the company’s future
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Attractive financial profile with predictable revenues and strong free cash flow
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History of organic revenue growth and multiple avenues for future growth
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Successfully completed and integrated strategic acquisitions and/or is well-positioned to drive growth through strategic acquisitions
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Attractive valuation and an appropriate capital structure with prudent use of leverage
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Commitment to environmental, social and governance issues that can be substantiated during our detailed due diligence process
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Majority or otherwise influential shareholder who we believe will continue to support management in driving value creation
for all shareholders
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Public markets-ready, yet committed to retaining the rigorous operational growth and operating cost framework developed in
the private markets
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Offering an attractive risk-adjusted return for our shareholders
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These criteria are not intended to be exhaustive.
Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these
general criteria as well as other considerations and factors that our management team and advisors may deem relevant. In the event
that we decide to enter into our initial business combination with a target business that does not meet the above criteria and
guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related
to our initial business combination, which, as discussed in this Form 10-K, would be in the form of proxy solicitation materials
or tender offer documents that we would file with the SEC.
We may need to obtain additional financing
either to complete our initial business combination or because we become obligated to redeem a significant number of our public
shares upon completion of our initial business combination. We intend to acquire a company with an enterprise value significantly
above the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants. Depending on the size of
the transaction or the number of public shares we become obligated to redeem, we may potentially utilize several additional financing
sources, including but not limited to the issuance of additional securities to the sellers of the target, the issuance of debt
by banks or other lenders or the owners of the target, a private placement to raise additional funds, or a combination of the foregoing.
If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will
be forced to cease operations and liquidate the Trust Account. In addition, following our initial business combination, if cash
on hand is insufficient to meet our obligations or our working capital needs, we may need to obtain additional financing.
Notwithstanding the foregoing, these criteria
and guidelines are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination
may or may not be based, to the extent relevant, on these general criteria and guidelines as well as other considerations, factors,
criteria and guidelines that our management may deem relevant.
Our Acquisition Process
In evaluating a prospective target business,
we expect to conduct an extensive due diligence review, which may encompass, among other things, meetings with incumbent management
and employees, document reviews, interviews of customers and suppliers, inspection of facilities, and a review of financial and
other information about the target and its industry.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our Sponsor, officers or directors or where Hamilton Lane or its clients
may have an investment. In the event we seek to complete our initial business combination with a company that is affiliated with
our Sponsor or any of our officers or directors, we, or a committee of our independent directors, if required by applicable law
or based upon the decision of our board of directors or a committee thereof, will obtain an opinion that our initial business combination
is fair to us and our stockholders from a financial point of view from either an independent investment banking firm or an independent
accounting firm.
Our Sponsor, our directors and members of
our management team own, directly or indirectly, our founder shares, and/or Private Placement Warrants and, accordingly, may have
a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating
a particular business combination if the retention or resignation of any such officers and directors is included by a target business
as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently
has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which
such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers
or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she then has fiduciary
or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to
such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers and directors will
materially affect our ability to complete our business combination. Our amended and restated certificate of incorporation provides
that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly
offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are
legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
Our officers, directors and any of their
respective affiliates may Sponsor or form, and in the case of individuals, serve as a director or officer of, other blank check
companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present
additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any such potential conflicts
would materially affect our ability to complete our initial business combination.
Initial Business Combination
Nasdaq listing rules require that our initial
business combination must be with one or more target businesses that together have an aggregate fair market value equal to at least
80% of the value of the Trust Account (excluding any deferred underwriting fees and taxes payable on the income earned on the Trust
Account) at the time of our signing a definitive agreement in connection with our initial business combination. We refer to this
as the 80% of net assets test. Our board of directors will make the determination as to the fair market value of our initial business
combination. The fair market value of the target or targets will be determined by our board of directors based upon one or more
standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value).
Even though our board of directors will rely on generally accepted standards, our board of directors will have discretion to select
the standards employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly,
investors will be relying on the business judgment of the board of directors in evaluating the fair market value of the target
or targets. The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will
provide public stockholders with our analysis of our satisfaction of the 80% of net assets test, as well as the basis for our determinations.
If our board of directors is not able to independently determine the fair market value of the our initial business combination,
we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions with respect to the satisfaction of the 80% of net assets test. While we consider it unlikely that our board of directors
will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable
to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of
uncertainty as to the value of a target’s assets or prospects.
We may structure our initial business
combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will
own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the
post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet
certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete an
initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to
register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50%
or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively
own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial
business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in
exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in
the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to
our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business
combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by
the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into
account for purposes of Nasdaq’s 80% of net assets test. If the initial business combination involves more than one
target business, the 80% of net assets test will be based on the aggregate value of all of the transactions and we will treat
the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder
approval, as applicable.
Other Considerations
We are not prohibited from pursuing an initial
business combination or subsequent transaction with a company that is affiliated with Hamilton Lane, its clients, our Sponsor,
officers or directors. In the event we seek to complete our initial business combination or, subject to certain exceptions, subsequent
material transactions with a company that is affiliated with our Sponsor or any of our officers or directors, we, or a committee
of independent directors, will obtain an opinion from an independent investment banking firm or an independent accounting firm
that such initial business combination or transaction is fair to our company from a financial point of view.
Our officers and directors are not required
to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management
time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Effecting Our Initial Business Combination
We are not presently engaged in, and we
will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial business combination using
cash from the proceeds of the Initial Public Offering and the private placement of the Private Placement Warrants, the proceeds
of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop
agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of
the target, or a combination of the foregoing. We may seek to complete our initial business combination with a company or business
that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks
inherent in such companies and businesses.
If our initial business combination is paid
for using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our Class A Common Stock, we may apply the balance
of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies or for working capital.
We may seek to raise additional funds through
a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may
effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the Trust
Account. In addition, we intend to target businesses larger than we could acquire with the net proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, and may as a result be required to seek additional financing to complete such proposed
initial business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing
only simultaneously with the completion of our initial business combination. In the case of an initial business combination funded
with assets other than the Trust Account assets, our proxy materials or tender offer documents disclosing the initial business
combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such
financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business
combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising
any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
We anticipate that target business
candidates will be brought to our attention from various sources, including our global networks, as well as other sources
such as investment bankers and investment professionals. Target businesses may be brought to our attention by such
unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to
target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have
read the final prospectus filed with the SEC in connection with our Initial Public Offering and know what types of businesses
we are targeting. Our Sponsor, officers and directors and their respective affiliates may also bring to our attention target
business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or
discussions they may have. While we do not presently anticipate engaging the services of professional firms or other
individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in
the future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be
determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the
extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available
to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our
best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any
such fee will be paid out of the funds held in the Trust Account. In no event will our Sponsor or any of our existing
officers or directors, or any entity with which our Sponsor or officers are affiliated, be paid any finder’s fee,
reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or
in connection with any services rendered for any services they render in order to effectuate, the completion of our initial
business combination (regardless of the type of transaction that it is). Although none of our Sponsor, officers or directors,
or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees
from a prospective business combination target in connection with a contemplated initial business combination, we do not have
a policy that prohibits our Sponsor, officers or directors, or any of their respective affiliates, from negotiating for the
reimbursement of out-of-pocket expenses by a target business. We have agreed to reimburse our Sponsor for any out-of-pocket
expenses related to identifying, investigating and completing an initial business combination. Some of our officers and
directors may enter into employment or consulting agreements with the post-transaction company following our initial business
combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection
process of an initial business combination candidate.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with Hamilton Lane, our Sponsor, officers or directors, or their respective
affiliates. In the event we seek to complete our initial business combination with a company that is affiliated with our Sponsor,
officers or directors, or their respective affiliates, we, or a committee of independent directors, will obtain an opinion from
an independent investment banking firm or an independent accounting firm that our initial business combination is fair to our company
from a financial point of view. We are not required to obtain such an opinion in any other context.
If any of our officers or directors becomes
aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has
pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to
such entity prior to presenting such business combination opportunity to us. Our officers and directors currently have certain
relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Selection of a Target Business and Structuring of our Initial
Business Combination
Nasdaq listing rules require that our
initial business combination must be with one or more target businesses that together have an aggregate fair market value of
at least 80% of the value of the Trust Account (excluding any deferred underwriting fees and taxes payable on the income
earned on the Trust Account) at the time of our signing a definitive agreement in connection with our initial business
combination. The fair market value of the target or targets will be determined by our board of directors based upon one or
more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or
book value). Even though our board of directors will rely on generally accepted standards, our board of directors will have
discretion to select the standards employed. In addition, the application of the standards generally involves a substantial
degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating
the fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in
connection with any proposed transaction will provide public stockholders with our analysis of our satisfaction of the 80% of
net assets test, as well as the basis for our determinations. If our board of directors is not able to independently
determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment
banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such
criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of
the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced
with the business of a particular target or if there is a significant amount of uncertainty as to the value of a
target’s assets or prospects. We do not currently intend to purchase multiple businesses in unrelated industries in
conjunction with our initial business combination. Subject to this requirement, our management will have virtually
unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be
permitted to effectuate our initial business combination with another blank check company or a similar company with nominal
operations.
In any case, we will only complete an initial
business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion
of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account for
purposes of the 80% of net assets test. There is no basis to evaluate the possible merits or risks of any target business with
which we may ultimately complete our initial business combination.
To the extent we effect our initial business
combination with a company or business that may be financially unstable or in its early stages of development or growth we may
be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective business target,
we expect to conduct a thorough due diligence review, which may encompass, among other things, meetings with incumbent management
and key employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial
and other information that will be made available to us.
The time required to select and evaluate
a target business and to structure and complete our initial business combination, and the costs associated with this process, are
not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation
of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring
losses and will reduce the funds we can use to complete another business combination.
Redemption Rights for Public Stockholders upon Completion
of our Initial Business Combination or Certain Stockholder Votes to Amend our Amended and Restated Certificate of Incorporation
We will provide our public stockholders
with the opportunity to redeem all or a portion of their shares of Class A Common Stock upon (i) the completion of our initial
business combination or (ii) a stockholder vote to approve an amendment to our amended and restated certificate of incorporation
(A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing
of the Initial Public Offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity. Such redemptions, if any, will be made at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account as of two business days prior to the event triggering the right to redeem, including
interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes,
divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the Trust Account
is initially anticipated to be approximately $10.00 per public share. The per-share amount we will distribute to investors who
properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The
redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its public
shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants.
Our initial stockholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption
rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business
combination or a stockholder vote to approve an amendment to our amended and restated certificate of incorporation, as described
above.
Manner of Conducting Redemptions in Conjunction
with a Stockholder Vote on our Initial Business Combination
We will provide our public stockholders with
the opportunity to redeem all or a portion of their shares of Class A Common Stock upon the completion of our initial business
combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by means
of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the
transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange
listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval
while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding
common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. If we structure
an initial business combination with a target company in a manner that requires stockholder approval, we will not have discretion
as to whether to seek a stockholder vote to approve the proposed initial business combination. We may conduct redemptions without
a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange
listing requirements or we choose to seek stockholder approval for business or other reasons. So long as we obtain and maintain
a listing for our securities on Nasdaq, we will be required to comply with such rules.
If a stockholder vote is not required and
we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate
of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement of our initial
business combination, we or our Sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of
our Class A Common Stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule
14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant
to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender
offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number
of public shares which are not purchased by our Sponsor, which number will be based on the requirement that we may not redeem public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business
combination and after payment of deferred underwriting commissions (so that we are not subject to the SEC’s “penny
stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our
initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the
tender offer and not complete the initial business combination.
If, however, stockholder approval of the
transaction is required by law or stock exchange listing requirements, or we decide to obtain stockholder approval for business
or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
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file proxy materials with the SEC.
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In the event that we seek stockholder approval
of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders
with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, we will
complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares
of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock
of the company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant to the letter
agreement, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after the
Initial Public Offering (including in open market and privately negotiated transactions) in favor of our initial business combination.
For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect
on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’
founder shares, we would need only 11,364,707, or 41.2% (assuming all outstanding shares are voted), or 3,247,060, or 11.8% (assuming
only the minimum number of shares representing a quorum are voted), of the 27,600,000 public shares sold in the Initial Public
Offering to be voted in favor of an initial business combination in order to have our initial business combination approved. We
intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting,
if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and
the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.
Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction.
Our amended and restated certificate of incorporation
provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 upon consummation of our initial business combination and after payment of deferred underwriting commissions (so that
we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which
may be contained in the agreement relating to our initial business combination. For example, the proposed initial business combination
may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms
of the proposed initial business combination. In the event the aggregate cash consideration we would be required to pay for all
shares of Class A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete
the initial business combination or redeem any shares, and all shares of Class A Common Stock submitted for redemption will be
returned to the holders thereof.
Limitation on Redemption upon Completion of our Initial Business
Combination if We Seek Stockholder Approval
Notwithstanding the foregoing, if we
seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our
initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation
provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such
stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be
restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the Initial
Public Offering, which we refer to as the “Excess Shares.” Such restriction shall also be applicable to our
affiliates. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent
attempts by such holders to use their ability to exercise their redemption rights against a proposed initial business
combination as a means to force us or our management to purchase their shares at a significant premium to the then-current
market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15%
of the shares sold in the Initial Public Offering could threaten to exercise its redemption rights if such holder’s
shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms.
By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in the Initial Public Offering
without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to
block our ability to complete our initial business combination, particularly in connection with an initial business
combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares)
for or against our initial business combination.
Redemption of Public Shares and Liquidation if No Initial
Business Combination
Our amended and restated certificate
of incorporation provides that we will have only 24 months from the closing of the Initial Public Offering to complete our initial
business combination. If we do not complete our initial business combination within such 24-month period or during any extended
time that we have to consummate an initial business combination beyond 24 months as a result of a stockholder vote to amend our
amended and restated certificate of incorporation (an “Extension Period”), we will: (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the
public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including
interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes
(less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption
rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial
business combination within the 24-month time period.
Tendering Stock Certificates in Connection with a Tender
Offer or Redemption Rights
We may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either
tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed
to such holders, or up to two business days prior to the initial vote on the proposal to approve the initial business combination
in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository
Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials,
as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate
whether we are requiring public stockholders to satisfy such delivery requirements, which may include the requirement that a beneficial
holder must identify itself in order to validly redeem its public shares. Accordingly, a public stockholder would have from the
time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on
the initial business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to
exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic
delivery of their public shares.
There is a nominal cost associated with
the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The
transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost
on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise
redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless
of the timing of when such delivery must be effectuated.
The foregoing is different from the
procedures used by many blank check companies. In order to perfect redemption rights in connection with their business
combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial
business combination, and a holder could simply vote against a proposed initial business combination and check a box on the
proxy card indicating such holder was seeking to exercise his or her redemption rights. After the initial business
combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her
certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of
the initial business combination during which he or she could monitor the price of the company’s stock in the market.
If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually
delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were
aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the
completion of the initial business combination until the redeeming holder delivered its certificate. The requirement for
physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is
irrevocable once the initial business combination is approved.
Any request to redeem such shares, once
made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting
set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection
with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights,
such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated
that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after
the completion of our initial business combination.
If our initial business combination is not
approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the Trust Account. In such case, we will promptly return any
certificates delivered by public holders who elected to redeem their shares.
If our initial proposed initial business
combination is not completed, we may continue to try to complete an initial business combination with a different target until
24 months from the closing of the Initial Public Offering or during
any Extension Period.
Competition
In identifying, evaluating and selecting
a target business for our initial business combination, we may encounter competition from other entities having a business objective
similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses
seeking strategic business combinations. Many of these entities are well established and have extensive experience identifying
and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial,
technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available
financial resources. This inherent limitation may give others with greater resources an advantage in pursuing the initial business
combination of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise
their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants,
and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors
may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Employees
We currently have three officers. These
individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their
time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will
devote in any time period will vary based on whether a target business has been selected for our initial business combination and
the stage of the initial business combination process we are in. We do not intend to have any full-time employees prior to the
completion of our initial business combination.
Item
1A. Risk Factors.
An investment in our securities involves
a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this Form 10-K, before making a decision to invest in our Units, warrants or shares. If any of the following events occur,
our business, financial condition and operating results may be materially adversely affected. In that event, the trading price
of our securities could decline, and you could lose all or part of your investment.
Risks relating to Our Business and the Initial Business Combination
Our public stockholders may not be
afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business
combination even though a majority of our public stockholders do not support such a combination.
We may choose not to hold a stockholder
vote to approve our initial business combination unless the initial business combination would require stockholder approval under
applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other reasons.
Except as required by law, the decision as to whether we will seek stockholder approval of a proposed initial business combination
or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will
be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise
require us to seek stockholder approval. Accordingly, we may complete our initial business combination even if holders of a majority
of our public shares do not approve of the initial business combination we complete.
If we seek stockholder approval of
our initial business combination, our initial stockholders have agreed to vote in favor of such initial business combination, regardless
of how our public stockholders vote.
Pursuant to the letter agreement, our initial
stockholders have agreed to vote their founder shares, as well as any public shares purchased during or after the Initial Public
Offering (including in open market and privately negotiated transactions), in favor of our initial business combination. As a result,
in addition to our initial stockholders’ founder shares, we would need only 11,364,707, or 41.2% (assuming all outstanding
shares are voted), or 3,247,060, or 11.8% (assuming only the minimum number of shares representing a quorum are voted), of the
27,600,000 public shares sold in the Initial Public Offering to be voted in favor of an initial business combination in order to
have our initial business combination approved. Our initial stockholders own shares representing approximately 15% of our outstanding
shares of common stock, subject to proportional decreases due to the potential forfeiture of shares by our Sponsor. Accordingly,
if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders to vote in favor
of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such
initial business combination.
Your only opportunity to affect the
investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares
from us for cash, unless we seek stockholder approval of the initial business combination.
At the time of your investment in us, you
will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our
board of directors may complete an initial business combination without seeking stockholder approval, public stockholders may not
have the right or opportunity to vote on the initial business combination, unless we seek such stockholder vote.
Accordingly, if we do not seek stockholder approval, your only
opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption
rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our
public stockholders in which we describe our initial business combination.
The ability of our public stockholders
to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which
may make it difficult for us to enter into an initial business combination with a target.
We may seek to enter into an initial
business combination agreement with a prospective target that requires as a closing condition that we have a minimum net
worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to
meet such closing condition and, as a result, would not be able to proceed with the initial business combination.
Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less
than $5,000,001 upon consummation of our initial business combination and after payment of deferred underwriting commissions
(so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash
requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting
all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination and after payment of deferred underwriting commissions or such greater amount necessary
to satisfy a closing condition as described above, we would not proceed with such redemption and the related business
combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks
and, thus, may be reluctant to enter into an initial business combination with us.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business
combination or optimize our capital structure.
At the time we enter into an agreement for
our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will
need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account
to meet such requirements, or arrange for third-party financing. In addition, if a larger number of shares are submitted for redemption
than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account
or arrange for third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution
provisions of the Class B Common Stock result in the issuance of Class A shares on a greater than one-to-one basis upon conversion
of the Class B Common Stock at the time of our business combination. The above considerations may limit our ability to complete
the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting
commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business
combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be
reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held by non-redeeming
stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business
combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement requires us to
use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is
unsuccessful, you would not receive your pro rata portion of the Trust Account until we liquidate the Trust Account. If you
are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may
trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material
loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able
to sell your stock in the open market.
The requirement that we complete
our initial business combination within the prescribed timeframe may give potential target businesses leverage over us in
negotiating an initial business combination and may decrease our ability to conduct due diligence on potential business
combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial
business combination on terms that would produce value for our stockholders.
Any potential target business with which
we enter into negotiations concerning an initial business combination will be aware that we must complete our initial business
combination within 24 months from the closing of the Initial Public Offering or seek a stockholder approved extension of such
period. Consequently, such target business may obtain leverage over us in negotiating an initial business combination, knowing
that if we do not complete our initial business combination with that particular target business, we may be unable to complete
our initial business combination with any target business. This risk will increase as we get closer to the timeframe described
above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms
that we would have rejected upon a more comprehensive investigation.
The due diligence process that we
undertake in connection with our initial business combination may not reveal all facts that may be relevant in connection with
an investment.
We plan to conduct due diligence in connection
with our initial business combination that we deem reasonable and appropriate based on the facts and circumstances applicable.
When conducting due diligence, we may be required to evaluate important and complex business, financial, tax, accounting, technological,
environmental, social, governance and legal and regulatory issues. Outside consultants, legal advisors and accountants may be involved
in the due diligence process in varying degrees depending on the target of the potential business combination and the parties involved.
Nevertheless, when conducting due diligence and making an assessment regarding a potential business combination, we will rely on
the resources available to us, including information provided by the target of the potential business combination and, in some
circumstances, third-party investigations, and such an investigation will not necessarily result in the business combination ultimately
being successful.
Moreover, the due diligence investigation
that we will carry out may not reveal or highlight all relevant facts (including bribery, fraud or other illegal activities) or
risks that are necessary or helpful in evaluating such potential business combination. Instances of bribery, fraud, accounting
irregularities and other improper, illegal or corrupt practices can be difficult to detect. Such misconduct may undermine our due
diligence efforts with respect to the target of the potential business combination. Further, we may not identify or foresee future
developments that could have a material adverse effect on the target, such as misconduct by personnel at the target. Financial
fraud or other deceptive practices, or failures by such personnel to comply with anti-bribery, trade sanctions or other legal and
regulatory requirements, could cause significant legal, reputational and business harm to us.
Our search for a business combination,
and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the
ongoing coronavirus (COVID-19) pandemic and the status of debt and equity markets.
On March 11, 2020, the World
Health Organization characterized the COVID-19 outbreak as a “pandemic.” The COVID-19 pandemic has resulted, and
other infectious diseases could result, in a widespread health crisis that has and will continue to adversely affect
economies and financial markets worldwide, and the business of any potential target business with which we consummate a
business combination may also be materially and adversely affected. Furthermore, we may be unable to complete a business
combination if continued concerns relating to COVID-19 restrict travel, limit the ability to conduct due diligence and have
meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to
negotiate and consummate a transaction in a timely manner, or if COVID-19 causes a prolonged economic downturn. The effects
of the COVID-19 pandemic on businesses, and the inability to accurately predict the future impact of the pandemic on
businesses, has also made determinations and negotiations of valuation more difficult, which could make it more difficult to
consummate a business combination transaction.
The extent to which COVID-19 ultimately
impacts our identification and consummation of a business combination will depend on future developments, which are highly uncertain
and cannot be predicted, including new information which may emerge concerning the severity and spread of COVID-19 and actions
to contain the virus or treat its impact, among others. While vaccines for COVID-19 are being, and have been developed, there is
no guarantee that any such vaccine will be durable and effective consistent with current expectations and we expect it will take
significant time before the vaccines are available and accepted on a significant scale. If the disruptions posed by COVID-19 or
other matters of global concern continue for an extended period of time, our ability to consummate a business combination, or the
operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to coordinate as
a team or to consummate a business combination may be dependent on the ability to raise equity and debt financing which may be
impacted by COVID-19 and other events, including as result of increased market volatility, decreased market liquidity and third
party financing being available on terms acceptable to us.
We may not be able to complete our
initial business combination within the prescribed timeframe, in which case we would cease all operations except for the purpose
of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.00
per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our amended and restated certificate of
incorporation provides that we must complete our initial business combination within 24 months from the closing of the Initial
Public Offering. We may not be able to find a suitable target business and complete our initial business combination within such
time period. If we have not completed our initial business combination within such time period or during any Extension Period,
we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously
released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by
the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as
stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board
of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. In such case, our public stockholders may only receive $10.00 per share, and our
warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the
redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the Trust Account
could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other
risk factors below.
If we seek stockholder approval of
our initial business combination, our Sponsor, directors, officers, advisors and their affiliates may elect to purchase public
shares or Public Warrants from public stockholders, which may influence a vote on a proposed initial business combination and reduce
the public “float” of our Class A Common Stock.
If we seek stockholder approval of our
initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant
to the tender offer rules, our Sponsor, directors, officers, advisors or their affiliates may purchase public shares or
Public Warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or
following the completion of our initial business combination, although they are under no obligation to do so. However, they
have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or
conditions for any such transactions. None of the funds in the Trust Account will be used to purchase public shares or Public
Warrants in such transactions. Such a purchase may include a contractual acknowledgement that such stockholder, although
still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its
redemption rights. In the event that our Sponsor, directors, officers, advisors or their affiliates purchase public shares in
privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such
selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases
could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining
stockholder approval of the initial business combination, or to satisfy a closing condition in an agreement with a target
that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of Public Warrants could
be to reduce the number of Public Warrants outstanding or to vote such warrants on any matters submitted to the warrant
holders for approval in connection with our initial business combination. Any such purchases of our securities may result in
the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be
reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to
such reporting requirements.
In addition, if such purchases are made,
the public “float” of our Class A Common Stock or Public Warrants and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national
securities exchange.
If a stockholder fails to receive
notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the
procedures for tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules
or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance
with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not
become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or redeem public shares, which may include the requirement that a beneficial
holder must identify itself. For example, we may require our public stockholders seeking to exercise their redemption rights, whether
they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer
agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the
initial vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver
their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures,
its shares may not be redeemed.
You will not be entitled to protections
normally afforded to investors of many other blank check companies.
Since the net proceeds of the Initial Public
Offering and the sale of the Private Placement Warrants are intended to be used to complete an initial business combination with
a target business that has not been identified, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we had net tangible assets in excess of $5,000,000 upon the successful completion of the Initial
Public Offering and the sale of the Private Placement Warrants and filed a Current Report on Form 8-K, including an audited balance
sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such
as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this
means we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419.
Moreover, if the Initial Public Offering were subject to Rule 419, that rule would prohibit the release of any interest earned
on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in connection with
our completion of an initial business combination.
If we seek stockholder approval of
our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group”
of stockholders are deemed to hold in excess of 15% of our Class A Common Stock, you will lose the ability to redeem all such shares
in excess of 15% of our Class A Common Stock.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate
of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as
defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than
an aggregate of 15% of the shares sold in the Initial Public Offering without our prior consent, which we refer to as the “Excess
Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess
Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence
over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if
you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to
the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares
exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially
at a loss.
Because of our special purpose acquisition
company structure and limited resources and the significant competition for business combination opportunities, it may be more
difficult for us to complete our initial business combination. If we do not complete our initial business combination, our public
stockholders may receive only approximately $10.00 per share on our redemption of our public shares, or less than such amount in
certain circumstances, and our warrants will expire worthless.
We expect to encounter competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or
investment partnerships), other blank check companies and other entities competing for the types of businesses we intend to
acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and
effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many
of these competitors possess similar technical, human and other resources to ours, and our financial resources will be
relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target
businesses we could potentially acquire with the net proceeds of the Initial Public Offering and the sale of the Private
Placement Warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will
be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing
the acquisition of certain target businesses. Furthermore, because we are obligated to pay cash for the shares of Class A
Common Stock which our public stockholders redeem in connection with our initial business combination, target companies will
be aware that this may present closing risk by reducing the resources available to us for our initial business combination.
Additionally, potential target companies may be less inclined to consummate a transaction with us because definitive
documentation for such a transaction will preclude any recourse against our Trust Account, meaning that potential
counterparties may determine that they do not have adequate contractual remedies in the event a transaction fails to close.
These factors may place us at a competitive disadvantage in successfully negotiating an initial business combination. If we
do not complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on
the liquidation of our Trust Account and our warrants will expire worthless. In certain circumstances, our public
stockholders may receive less than $10.00 per share upon our liquidation. See “—If third parties bring claims
against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by
stockholders may be less than $10.00 per share” and other risk factors below.
If the net proceeds of the Initial
Public Offering and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient to allow us
to operate for at least the next 24 months, we may be unable to complete our initial business combination, in which case our
public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will
expire worthless.
The funds available to us outside of the
Trust Account may not be sufficient to allow us to operate for at least the next 24 months, assuming that our initial business
combination is not completed during that time. We believe that the funds available to us outside of the Trust Account will be sufficient
to allow us to operate for at least the next 24 months; however, we cannot assure you that our estimate is accurate. Of the
funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search
for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision
(a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for
transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed initial
business combination, although we do not have any current intention to do so. If we entered into a letter of intent or other agreement
where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds
(whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due
diligence with respect to, a target business. If we do not complete our initial business combination, our public stockholders may
receive only approximately $10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless. In
certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation. See “—If
third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 per share” and other risk factors below.
If the net proceeds of the Initial
Public Offering and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient, it could limit
the amount available to fund our search for a target business or businesses and complete our initial business combination and we
will depend on loans from our Sponsor or management team to fund our search for an initial business combination, to pay our franchise
and income taxes and to complete our initial business combination. If we are unable to obtain these loans, we may be unable to
complete our initial business combination.
If we are required to seek additional
capital, we would need to borrow funds from our Sponsor, management team or other third parties to operate or may be forced
to liquidate. None of our Sponsor, members of our management team nor any of their affiliates is under any obligation to
advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the Trust Account
or from funds released to us upon completion of our initial business combination. Up to $2,000,000 of such loans may be
converted into private placement-equivalent warrants at a price of $1.50 per warrant at the option of the lender. Prior to
the completion of our initial business combination, we do not expect to seek loans from parties other than our Sponsor or an
affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against
any and all rights to seek access to funds in our Trust Account. If we are unable to obtain these loans, we may be unable to
complete our initial business combination. If we do not complete our initial business combination because we do not have
sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. Consequently, our
public stockholders may only receive approximately $10.00 per share on our redemption of our public shares, and our warrants
will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the
redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the Trust
Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per
share” and other risk factors below.
If third parties bring claims against
us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be
less than $10.00 per share.
Our placing of funds in the Trust Account
may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other
than our independent registered public accounting firm), prospective target businesses and other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account
for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements
they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in
each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account.
If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management
will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has
not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to
us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive
to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target
businesses that we might pursue. WithumSmith+Brown, PC, our independent registered public accounting firm, and the underwriters
of the Initial Public Offering, will not execute agreements with us waiving such claims to the monies held in the Trust Account.
Examples of possible instances where
we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose
particular expertise or skills are believed by management to be significantly superior to those of other consultants that
would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a
waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a
result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust
Account for any reason. Upon redemption of our public shares, if we do not complete our initial business combination within
the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we
will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the
ten years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be
less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors. Pursuant to a letter
agreement, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services
rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent,
confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to
below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust
Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value
of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or
prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or
not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the Initial Public
Offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our Sponsor
to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds
to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company.
Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims
were successfully made against the Trust Account, the funds available for our initial business combination and redemptions
could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business
combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None
of our officers, directors or members of our Sponsor will indemnify us for claims by third parties including, without
limitation, claims by vendors and prospective target businesses.
If we are deemed to be an investment
company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities
may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
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In addition, we may have imposed upon us burdensome requirements,
including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing,
reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive
of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete an initial
business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy
businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or
to be a passive investor.
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We do not believe that our principal activities
will subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account may only be invested in United
States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not
permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having
a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in
the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within
the meaning of the Investment Company Act. The Trust Account is intended as a holding place for funds pending the earliest to occur
of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly submitted
in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance
or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering
or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity;
or (iii) absent an initial business combination within 24 months from the closing of the Initial Public Offering or during
any Extension Period, our return of the funds held in the Trust Account to our public stockholders as part of our redemption of
the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company
Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require
additional expenses for which we have not allotted funds and may hinder our ability to complete an initial business combination
or may result in our liquidation. If we do not complete our initial business combination, our public stockholders may receive only
approximately $10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless.
Changes in laws or regulations, or
a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete
our initial business combination and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, are required to comply with certain SEC and other legal requirements.
It is possible that we will become subject to different or heightened rules or requirements promulgated by the SEC, and we may
become subject to heightened or increased scrutiny by the SEC. On December 10, 2020, the SEC’s office of Investor Education
and Advocacy issued an investor bulletin entitled What you Need to Know About SPACs. On December 22, 2020, the SEC’s
Division of Corporate Finance issued CF Disclosure Guidance: Topic No. 11 regarding special purpose acquisition companies. Compliance
with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
Those laws and regulations and their interpretation
and application may also change from time to time. In particular, it is possible that we may become subject to different or heightened
rules or requirements, or face increased regulatory scrutiny, by the SEC. These changes could have a material adverse effect on
our business, investments and results of operations, and we may not have launched our Company had we been subject to these changes
in laws, regulations or increased regulatory scrutiny at the time of the Initial Public Offering. In addition, a failure to comply
with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including
our ability to negotiate and complete our initial business combination and results of operations.
The grant of registration rights to
our initial stockholders may make it more difficult to complete our initial business combination, and the future exercise of such
rights may adversely affect the market price of our Class A Common Stock.
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in the Initial Public Offering, our initial stockholders and their permitted transferees
can demand that we register the shares of Class A Common Stock into which our founder shares are convertible, the Private Placement
Warrants, the shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants held, or to be held, by them,
and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or
the Class A Common Stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration
and availability of such a significant number of securities for trading in the public market may have an adverse effect on the
market price of our Class A Common Stock. In addition, the existence of the registration rights may make our initial business combination
more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they
seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A
Common Stock that is expected when the securities owned by our initial stockholders or holders of working capital loans or their
respective permitted transferees are registered.
Any stockholders who choose to remain
stockholders following our initial business combination could suffer a reduction in the value of their securities.
We will not, under the terms of our amended
and restated certificate of incorporation, be permitted to effectuate our initial business combination with another blank check
company or similar company with nominal operations. To the extent we complete our initial business combination, we may be affected
by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable
business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our
control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot assure you that an investment in our Units will ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain
stockholders following our initial business combination could suffer a reduction in the value of their securities.
Such stockholders are unlikely to have a
remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers
or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim
under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination
contained an actionable material misstatement or material omission.
We may seek business combination opportunities
in industries or sectors which may or may not be outside of our management team’s area of expertise.
We will consider an initial business
combination outside of our management team’s area of expertise if an initial business combination candidate is
presented to us and we determine that such candidate offers an attractive business combination opportunity for our company or
we are unable to identify a suitable candidate in our management team’s area of expertise after having expended a
reasonable amount of time and effort in an attempt to do so. Although our management will endeavor to evaluate the risks
inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess
all of the significant risk factors. We also cannot assure you that an investment in our securities will not ultimately
prove to be less favorable to investors than a direct investment, if an opportunity were available, in an initial business
combination candidate. In the event we elect to pursue a business combination outside of the areas of our management
team’s expertise, our management team’s expertise may not be directly applicable to its evaluation or operation,
and the information contained in this Form 10-K regarding the areas of our management team’s expertise would not be
relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to
adequately ascertain or assess all of the significant risk factors. Accordingly, any stockholders who choose to remain
stockholders following our initial business combination could suffer a reduction in the value of their shares. Such
stockholders are unlikely to have a remedy for such reduction in value.
Although we have identified general
criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial
business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which
we enter into our initial business combination may not have attributes consistent with our general criteria and guidelines.
Although we have identified general criteria
and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our
initial business combination will not have these positive attributes. If we complete our initial business combination with a target
that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business
that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with
a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum
net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide
to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of
our initial business combination if the target business does not meet our general criteria and guidelines. If we do not complete
our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of
our Trust Account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than
$10.00 per share on the redemption of their shares. See “—If third parties bring claims against us, the proceeds held
in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per
share” and other risk factors below.
We may seek business combination opportunities
with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could
subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To the extent we complete our initial business
combination with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be
affected by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues
or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk
factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control
and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion
from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance
from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business
combination with an affiliated entity or our board cannot independently determine the fair market value of the target business
or businesses, we are not required to obtain an opinion from an independent investment banking firm or an independent accounting
firm that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders
will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted
by the financial community. Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable,
related to our initial business combination.
We may issue additional common stock
or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination. We may also issue shares of Class A Common Stock upon the conversion of the Class B Common Stock at a ratio
greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in
our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely
present other risks.
Our amended and restated certificate of
incorporation authorizes the issuance of up to 250,000,000 shares of Class A Common Stock, 25,000,000 shares of Class B common
stock, par value $0.0001 per share (the “Class B Common Stock”), and 1,000,000 shares of preferred stock, par value
$0.0001 per share. As of today there are 222,400,000 and 21,933,334 authorized but unissued shares of Class A Common Stock and
Class B Common Stock, respectively, available for issuance, which amount does not take into account the shares of Class A Common
Stock reserved for issuance upon exercise of outstanding warrants. There are no shares of preferred stock issued and outstanding.
Shares of Class B Common Stock are convertible into shares of our Class A Common Stock initially at a one-for-one ratio but subject
to adjustment as set forth herein, including in certain circumstances in which we issue Class A Common Stock or equity-linked securities
related to our initial business combination. Shares of Class B Common Stock are also convertible at the option of the holder at
any time.
We may issue a substantial number of
additional shares of common or preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A Common Stock (i) to redeem the
warrants in certain circumstances as described in this Form 10-K or (ii) upon conversion of the Class B Common Stock at a
ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions
contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of
incorporation provides, among other things, that prior to or in connection with our initial business combination, we may not
issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the Trust
Account or (ii) vote on any initial business combination. These provisions of our amended and restated certificate of
incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with the approval
of our stockholders. However, our officers and directors have agreed, pursuant to a written agreement with us, that they will
not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing
of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination within 24 months from the closing of the Initial Public
Offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock
upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then
outstanding public shares. The issuance of additional shares of common or preferred stock:
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may significantly dilute the equity interest of our investors;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our
common stock;
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could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our
present officers and directors; and
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may adversely affect prevailing market prices for our Units, Class A Common Stock and/or warrants.
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Resources could be wasted in researching
business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we do not complete our initial business combination, our public stockholders may receive only
approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account and
our warrants will expire worthless.
We anticipate that the investigation of
each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys, consultants
and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed
transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may
fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event
will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we do not complete our initial business combination, our public stockholders may
receive only approximately $10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless. In
certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See “—If
third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 per share” and other risk factors below.
We may engage in an initial business
combination with one or more target businesses that have relationships with entities that may be affiliated with Hamilton Lane,
its clients, our Sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
We may decide to acquire one or more
businesses with which Hamilton Lane, its clients, our Sponsor or one or more of our officers or directors is affiliated. Our
officers and directors also serve as officers and board members for other entities. Such entities may compete with us for
business combination opportunities. Our Sponsor, officers and directors are not currently aware of any specific opportunities
for us to complete our initial business combination with any entities with which they are affiliated, and there have been no
preliminary discussions concerning an initial business combination with any such entity or entities. Although we will not be
specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if
we determined that such affiliated entity met our criteria for an initial business combination and such transaction was
approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent
investment banking firm or an independent accounting firm regarding the fairness to our company from a financial point of
view of an initial business combination with a business affiliated with our officers, directors or existing holders,
potential conflicts of interest still may exist, including those that relate to Hamilton Lane, and as a result, the terms of
the initial business combination may not be as advantageous to our public stockholders as they would be absent any conflicts
of interest.
Since our Sponsor and its investors
will lose their entire at-risk investment in us if our initial business combination is not completed, a conflict of interest may
arise in determining whether a particular business combination target is appropriate for our initial business combination.
In September 2020, our Sponsor purchased
an aggregate of 14,375,000 shares of Class B Common Stock for an aggregate purchase price of $25,000, or approximately $0.002 per
share. On October 2, 2020, we effected a reverse stock split resulting in our Sponsor holding an aggregate of 11,500,000 founder
shares. In November 2020, our Sponsor transferred 25,000 founder shares to each of our independent directors. In December 2020,
our Sponsor forfeited 7,441,176 founder shares, resulting in our initial stockholders holding an aggregate of 4,058,824 founder
shares. In January 2021, we effected a stock split resulting in our initial stockholders holding 3,066,666 founder shares and 1,803,922
shares (which are subject to forfeiture and transfer restrictions unless and until the trading price of our Class A Common Stock
exceeds certain price thresholds during specified periods of time following the closing of our initial business combination). The
number of founder shares issued was determined based on the expectation that such founder shares not subject to forfeiture would
represent 15% of the outstanding shares after the Initial Public Offering. All of the founder shares will be worthless if we do
not complete an initial business combination. In addition, concurrently with the Initial Public Offering, our Sponsor purchased
an aggregate of 5,013,333 warrants at a price of $1.50 per warrant ($7,520,000 in the aggregate), which will also be worthless
if we do not complete an initial business combination. Our initial stockholders have entered into a letter agreement with us pursuant
to which they have agreed to vote any shares owned by them in favor of any proposed initial business combination and to waive their
redemption rights with respect to their founder shares and public shares in connection with (i) the completion of our initial
business combination and (ii) any stockholder vote to approve an amendment to our amended and restated certificate of incorporation
(A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing
of the Initial Public Offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity. In addition, we may obtain loans from our Sponsor, affiliates of our Sponsor or an officer or director.
The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting
a target business combination, completing an initial business combination and influencing the operation of the business.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete an initial business combination, which may adversely affect our leverage and financial
condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the
date hereof to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial
debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained
from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such,
no issuance of debt will affect the per-share amount available for redemption from the Trust Account. Nevertheless, the incurrence
of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay
our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we
breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation
of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such
financing while the debt is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available
for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund
other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in
government regulation;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements,
and execution of our strategy; and
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other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one
business combination with the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants which will
cause us to be solely dependent on a single business which may have a limited number of services and limited operating activities.
This lack of diversification may negatively impact our operating results and profitability.
Of the net proceeds from the Initial Public
Offering and the sale of the Private Placement Warrants, $276,000,000 is available to complete our initial business combination
and pay related fees and expenses (which includes $9,660,000 for the payment of deferred underwriting commissions).
We may effectuate our initial business
combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors,
including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements
with the SEC that present operating results and the financial condition of several target businesses as if they had been operated
on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may
subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to
complete several business combinations in different industries or different areas of a single industry. In addition, we intend
to focus our search for an initial business combination in a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset, or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may
have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
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We may attempt to simultaneously complete
business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination
and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire
several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us,
and delay our ability, to complete our initial business combination. We do not, however, intend to purchase multiple businesses
in unrelated industries in conjunction with our initial business combination. With multiple business combinations, we could also
face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single operating business. If we are unable to adequately address these
risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial
business combination with a private company about which little information is available, which may result in an initial business
combination with a company that is not as profitable as we suspected, if at all.
In pursuing our initial business combination
strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information
generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial
business combination on the basis of limited information, which may result in an initial business combination with a company that
is not as profitable as we suspected, if at all.
We do not have a specified maximum
redemption threshold. The absence of such a redemption threshold may make it possible for us to complete an initial business combination
with which a substantial majority of our stockholders do not agree.
Our amended and restated certificate of
incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination
and after payment of deferred underwriting commissions (such that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our
public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our
initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the
tender offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors,
advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class
A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms
of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial
business combination or redeem any shares, all shares of Class A Common Stock submitted for redemption will be returned to the
holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial
business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing
instruments. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing
instrument in a manner that will make it easier for us to complete our initial business combination that some of our stockholders
or warrant holders may not support.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and governing instruments,
including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased
redemption thresholds and extended the time to consummate an initial business combination. We cannot assure you that we will not
seek to amend our charter or governing instruments, including to extend the time to consummate an initial business combination
in order to effectuate our initial business combination.
The provisions of our amended and
restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the
agreement governing the release of funds from our Trust Account), including an amendment to permit us to withdraw funds from the
Trust Account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced
or eliminated, may be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than
that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of
incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders
may not support.
Our amended and restated certificate of
incorporation provides that any of its provisions related to pre-initial business combination activity (including the requirement
to deposit proceeds of the Initial Public Offering and the private placement of warrants into the Trust Account and not release
such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein and
including to permit us to withdraw funds from the Trust Account such that the per share amount investors will receive upon any
redemption or liquidation is substantially reduced or eliminated) may be amended if approved by holders of 65% of our common stock
entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account
may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended
and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote
thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. We may not issue additional securities
that can vote on amendments to our amended and restated certificate of incorporation. Our initial stockholders, who collectively
beneficially owned up to 15% (subject to proportional decreases due to the potential forfeiture of shares by our Sponsor) of our
common stock upon the closing of the Initial Public Offering, will participate in any vote to amend our amended and restated certificate
of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be
able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-initial business combination
behavior more easily than some other blank check companies, and this may increase our ability to complete an initial business combination
with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate
of incorporation.
Our initial stockholders have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of
incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial
business combination or to redeem 100% of our public shares if we do not complete our initial business combination within
24 months from the closing of the Initial Public Offering or (ii) with respect to any other provision relating to
stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the
opportunity to redeem their shares of Class A Common Stock upon approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account, divided by the number of then outstanding public
shares. These agreements are contained in a letter agreement that we have entered into with our initial stockholders. Our
other stockholders are not parties to, or third-party beneficiaries of, these agreements and will not have the ability to
pursue remedies against our Sponsor, officers or directors for any breach of these agreements. As a result, in the event of a
breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.
We may be unable to obtain additional
financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel
us to restructure or abandon a particular business combination.
We have not selected any specific business
combination target but intend to target businesses larger than we could acquire with the net proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants. As a result, we may be required to seek additional financing to complete such proposed
initial business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the
extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be
compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target
business candidate. Further, the amount of additional financing we may be required to obtain could increase as a result of future
growth capital needs for any particular transaction, the depletion of the available net proceeds in search of a target business,
the obligation to repurchase for cash a significant number of public shares from stockholders who elect redemption in connection
with our initial business combination and/or the terms of negotiated transactions to purchase public shares in connection with
our initial business combination. If we do not complete our initial business combination, our public stockholders may receive only
approximately $10.00 per share plus any pro rata interest earned on the funds held in the Trust Account and not previously
released to us to pay our franchise and income taxes on the liquidation of our Trust Account, and our warrants will expire worthless.
In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing
to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse
effect on the continued development or growth of the target business.
None of our officers, directors or stockholders
is required to provide any financing to us in connection with or after our initial business combination. If we do not complete
our initial business combination, our public stockholders may only receive approximately $10.00 per share on the liquidation of
our Trust Account, and our warrants will expire worthless. Furthermore, as described in the risk factor entitled “If third
parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received
by stockholders may be less than $10.00 per share,” under certain circumstances our public stockholders may receive less
than $10.00 per share upon the liquidation of the Trust Account.
Because we must furnish our stockholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination
with some prospective target businesses.
The federal proxy rules require that a proxy statement
with respect to a vote on an initial business combination meeting certain financial significance tests include historical and/or
pro forma financial statement disclosure in periodic reports. We would include the same financial statement disclosure in
connection with any tender offer documents. These financial statements may be required to be prepared in accordance with, or be
reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting
standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical
financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight
Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may
acquire because some targets may be unable to provide such financial statements in time for us to disclose such statements in
accordance with federal proxy or tender offer rules and complete our initial business combination within the prescribed timeframe.
Compliance obligations under the
Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial
and management resources, and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the
year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and
no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting
firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth
company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our
internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of
the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which
we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such business combination.
If we effect our initial business
combination with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional
risks that may negatively impact our operations.
If we effect our initial business combination
with a company with operations or opportunities outside of the United States, we would be subject to any special considerations
or risks associated with companies operating in an international setting, including any of the following:
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higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial
and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles and challenges in collecting accounts receivable;
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tax issues, including but not limited to tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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cultural and language differences;
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employment regulations;
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changes in industry, regulatory or environmental standards within the jurisdictions where we operate;
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public health or safety concerns and governmental restrictions, including those caused by outbreaks of pandemic disease such
as the COVID-19 pandemic;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United States; and
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government appropriations of assets.
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We may not be able to adequately address
these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations
and financial condition.
Subsequent to the completion of our
initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges
that could have a significant negative effect on our financial condition, results of operations and our stock price, which could
cause you to lose some or all of your investment.
Even if we conduct extensive due diligence
on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that may
be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of
these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other
charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even
though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may
cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a
target business or by virtue of our obtaining debt financing to partially finance the initial business combination. Accordingly,
any stockholders who choose to remain stockholders following the initial business combination could suffer a reduction in the value
of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them,
or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials,
as applicable, relating to the initial business combination constituted an actionable material misstatement or omission.
The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key
personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate
that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of an acquisition candidate will not
wish to remain in place.
Our management may not be able to maintain control of
a target business after our initial business combination.
We may structure an initial business combination
so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target,
our stockholders prior to the initial business combination may collectively own a minority interest in the post business combination
company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue
a transaction in which we issue a substantial number of new shares of Class A Common Stock in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of
a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than
a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may
subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock
than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control
of the target business. We cannot provide assurance that, upon loss of control of a target business, new management will possess
the skills, qualifications or abilities necessary to profitably operate such business.
We may have a limited ability to assess
the management of a prospective target business and, as a result, may affect our initial business combination with a target business
whose management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively
impact the value of our stockholders’ investment in us.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should
the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations
and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain
stockholders following the initial business combination could suffer a reduction in the value of their shares. Such stockholders
are unlikely to have a remedy for such reduction in value.
Risks Relating to our Management Team
We are dependent upon our officers
and directors and their departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals and, in particular, our officers and directors. We believe that our success depends on the continued
service of our officers and directors, at least until we have completed our initial business combination. We do not have an employment
agreement with, or key man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one
or more of our directors or officers could have a detrimental effect on us.
Our ability to successfully effect
our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel,
some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations
and profitability of our post-combination business.
Our ability to successfully effect our initial
business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business,
however, cannot presently be ascertained.
Although some of our key personnel may remain
with the target business in senior management or advisory positions following our initial business combination, it is likely that
some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals
we employ after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be
correct.
These individuals may be unfamiliar with
the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping
them become familiar with such requirements. In addition, the officers and directors of an initial business combination candidate
may resign upon completion of our initial business combination. The departure of an initial business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business. The role of an initial
business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an initial business combination candidate’s management team
will remain associated with the initial business combination candidate following our initial business combination, it is possible
that members of the management of an initial business combination candidate will not wish to remain in place. The loss of key personnel
could negatively impact the operations and profitability of our post-combination business.
Our officers and directors will allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our
affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between
our operations and our search for an initial business combination and their other businesses. Although we have retained and may
in the future retain consultants to perform certain services for the Company, we do not intend to have any full-time employees
prior to the completion of our initial business combination. Each of our officers and directors is engaged in other business endeavors
for which he may be entitled to substantial compensation and our officers and directors are not obligated to contribute any specific
number of hours per week to our affairs. Our independent directors may also serve as officers or board members for other entities.
If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs
in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative
impact on our ability to complete our initial business combination.
Certain of our officers and directors
are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended
to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity
a particular business opportunity should be presented.
Until we consummate our initial business
combination, we intend to engage in the business of identifying and combining with one or more businesses. Our officers and directors
are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged
in a similar business.
Hamilton Lane and its affiliates have
invested in diverse industries. There could be overlap between companies that would be suitable for a business combination
with us and companies that present an attractive investment opportunity for our Sponsor, our directors or officers, and
entities with which they currently are or may in the future be affiliated.
Our officers and directors also may become aware of business
opportunities which may be appropriate for presentation to us and other entities to which they owe certain fiduciary or contractual
duties. Any such opportunities may present additional conflicts of interest in pursuing an acquisition target, and our directors
and officers may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its
presentation to us. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate
opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her
capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake
and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity
to us without violating another legal obligation.
Hamilton Lane, our officers, directors,
security holders, clients and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly
prohibits our directors, officers, security holders, including Hamilton Lane or its clients, or affiliates from having a direct
or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which
we are a party or have an interest. In fact, we may enter into an initial business combination with a target business that is affiliated
with our Sponsor, our directors or officers, or where Hamilton Lane or its clients may have an investment, although we do not intend
to do so. We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities
of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The financial interests of Hamilton Lane and its clients, and
our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a business combination. Consequently, Hamilton Lane’s and our directors’ and officers’ discretion in identifying
and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and
timing of a particular business combination are appropriate and in our stockholders’ best interest.
Risks Relating to Ownership of Our Securities
You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be
forced to sell your public shares or warrants, potentially at a loss.
Our public stockholders will be
entitled to receive funds from the Trust Account only upon the earliest to occur of: (i) our completion of an initial
business combination, and then only in connection with those shares of Class A Common Stock that such stockholder properly
elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly
submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to
modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or
to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the
closing of the Initial Public Offering or (B) with respect to any other provision relating to stockholders’ rights
or pre-initial business combination activity and (iii) the redemption of our public shares if we do not complete an
initial business combination within 24 months from the closing of the Initial Public Offering or during any Extension
Period, subject to applicable law and as further described herein. In no other circumstances will a public stockholder have
any right or interest of any kind in the Trust Account. Holders of warrants will not have any right to the proceeds held in
the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your
public shares or warrants, potentially at a loss.
Nasdaq may delist our securities
from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us
to additional trading restrictions.
Our Units, warrants, and shares of Class
A Common Stock have been approved for listing on Nasdaq. Although, after giving effect to the Initial Public Offering, we met the
minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will continue
to be listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities
on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. We
must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities
(generally 300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate
compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements,
in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required
to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5,000,000 and we would
be required to have a minimum of 300 round lot holders of our unrestricted securities (with at least 50% of such round-lot holders
holding unrestricted securities with a market value of at least $2,500). We cannot assure you that we will be able to meet those
initial listing requirements at that time. If Nasdaq delists any of our securities from trading on its exchange and we are not
able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter
market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A Common Stock is a “penny stock” which will require brokers trading in our Class
A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading
market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement
Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Because our Units, Class A Common Stock and warrants are listed on Nasdaq,
our Units, Class A Common Stock and warrants are covered securities. Although the states are preempted from regulating the
sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and,
if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular
case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank
check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and
might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.
Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation
in each state in which we offer our securities, including in connection with our initial business combination.
Unlike many other similarly structured
blank check companies, our initial stockholders will receive additional shares of Class A Common Stock if we issue shares to consummate
an initial business combination.
The founder shares will automatically convert
into Class A Common Stock at the time of our initial business combination, or earlier at the option of the holders, on a one-for-one
basis, subject to adjustment as provided herein. In the case that additional shares of Class A Common Stock, or equity-linked securities
convertible into or exercisable or exchangeable for Class A Common Stock, are issued or deemed issued in excess of the amounts
offered in the Initial Public Offering and related to the closing of the initial business combination, the ratio at which founder
shares shall convert into Class A Common Stock will be adjusted so that the number of Class A Common Stock issuable upon conversion
of all founder shares will equal, in the aggregate, on an as-converted basis, 15% of the sum of (i) the total number of all
outstanding shares of common stock upon completion of the Initial Public Offering, plus (ii) all shares of Class A Common
Stock and equity-linked securities issued, or deemed issued in connection with the initial business combination (excluding any
shares or equity-linked securities issued, or to be issued, to any seller in the business combination, and any private placement-equivalent
warrants issued to our Sponsor or its affiliates upon conversion of loans made to us). This is different from most other similarly
structured blank check companies in which the initial stockholder will only be issued an aggregate of 15% of the total number of
shares to be outstanding prior to the initial business combination.
We may amend the terms of the warrants
in a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 50% of the then outstanding
Public Warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and
the number of shares of our Class A Common Stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered
form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval by the holders of at least 50% of the then outstanding Public Warrants to make any change
that adversely affects the interests of the registered holders of Public Warrants. Accordingly, we may amend the terms of the Public
Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment.
Although our ability to amend the terms of the Public Warrants with the consent of at least 50% of the then outstanding Public
Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the
warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of our Class A
Common Stock purchasable upon exercise of a warrant.
Our warrant agreement will designate
the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive
forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability
of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement provides that, subject
to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement,
including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction
shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these
provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act
or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any
person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to
have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope
of the forum provisions of our warrant agreement, is filed in a court other than a court of the State of New York or the United
States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our
warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal
courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions
(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement
action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit
a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which
may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable
with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving
such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results
of operations and result in a diversion of the time and resources of our management and board of directors.
A provision of our warrant agreement
may make it more difficult for us to consummate an initial business combination.
Unlike most blank check companies, if
(i) we issue additional shares of Class
A Common Stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business
combination at a Newly Issued Price of less than $9.20 per share;
(ii) the aggregate gross proceeds from such
issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial
business combination on the date of the consummation of our initial business combination (net of redemptions); and
(iii) the Market Value is below $9.20 per
share;
then the exercise price of the warrants
will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption
trigger prices will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued
Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the
Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with
a target business.
We may redeem your unexpired warrants
prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem
outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per
warrant, provided that the last reported sales price of our Class A Common Stock equals or exceeds $18.00 per share (as
adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and certain issuances of Class A
Common Stock and equity-linked securities) for any 20 trading days within the 30 trading-day period ending on the third
trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are
met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register
or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding
warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be
disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise
wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants
are called for redemption, is likely to be substantially less than the market value of your warrants. None of the Private
Placement Warrants will be redeemable by us (except as described elsewhere in this Form 10-K) so long as they are held by our
Sponsor or its permitted transferees.
In addition, we have the ability to redeem
the outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per
warrant upon a minimum of 30 days’ prior written notice of redemption, provided that the closing price
of our Class A Common Stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like and certain issuances of Class A Common Stock and equity-linked securities) for any 20 trading days
within the 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such
redemption and provided that certain other conditions are met, including that holders will be able to exercise
their warrants prior to redemption for a number of shares of Class A Common Stock determined based on the redemption date and the
fair market value of shares of our Class A Common Stock. The value received upon exercise of the warrants (1) may be less
than the value the holders would have received if they had exercised their warrants at a later time where the underlying share
price is higher and (2) where exercised on a cashless basis, may not compensate the holders for the value of the warrants,
including because the number of shares received is capped at 0.361 shares of Class A Common Stock per whole warrant (subject to
adjustment) irrespective of the remaining life of the warrants.
None of the Private Placement Warrants will
be redeemable by us, except as otherwise described in this Form 10-K, so long as they are held by our Sponsor or its permitted
transferees.
Our warrants and founder shares may
have an adverse effect on the market price of our Class A Common Stock and make it more difficult to effectuate our initial business
combination.
We issued warrants to purchase 9,200,000
shares of Class A Common Stock, at $11.50 per share, as part of the Units offered in the Initial Public Offering and, simultaneously
with the closing of the Initial Public Offering, we issued in a Private Placement Warrants to purchase an aggregate of 5,013,333
shares of Class A Common Stock, at $11.50 per share. Our initial stockholders currently own an aggregate of 4,870,588 founder shares.
The founder shares are convertible into shares of Class A Common Stock on a one-for-one basis, subject to adjustment as set forth
herein. In addition, if our Sponsor makes any working capital loans, up to $2,000,000 of such loans may be converted into warrants,
at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants,
including as to exercise price, exercisability and exercise period.
To the extent we issue shares of Class A
Common Stock to effectuate an initial business combination, the potential for the issuance of a substantial number of additional
shares of Class A Common Stock upon exercise of these warrants and conversion rights could make us a less attractive business combination
vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A Common
Stock and reduce the value of the shares of Class A Common Stock issued to complete the initial business combination. Therefore,
our warrants and founder shares may make it more difficult to effectuate an initial business combination or increase the cost of
acquiring the target business.
The Private Placement Warrants are
identical to the warrants sold as part of the Units in the Initial Public Offering except that, so long as they are held
by our Sponsor or its permitted transferees, (i) they will not be redeemable by us (except as described), (ii) they
(including the Class A Common Stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions,
be transferred, assigned or sold by our Sponsor until 30 days after the completion of our
initial business combination, (iii) they may be exercised by the holders on a cashless basis and (iv) they are
entitled to registration rights.
Because each Unit contains one-third
of one redeemable warrant and only a whole warrant may be exercised, the Units may be worth less than Units of other
blank check companies.
Each Unit contains one-third of one redeemable
warrant. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. Accordingly,
unless you purchase at least three Units, you will not be able to receive or trade a whole warrant. This is different from
other offerings similar to ours whose Units include one share of common stock and one warrant to purchase one whole share.
We have established the components of the Units in this way in order to reduce the dilutive effect of the warrants upon completion
of an initial business combination since the warrants will be exercisable in the aggregate for one third of the number of shares
compared to Units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive merger
partner for target businesses. Nevertheless, this Unit structure may cause our Units to be worth less than if they included
a warrant to purchase one whole share.
An active trading market for our securities
may not exist, which would adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly
due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market
for our securities may not exist or be sustained. You may be unable to sell your securities unless a market can be established
and sustained.
Provisions in our amended and restated
certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing
to pay in the future for our Class A Common Stock and could entrench management.
Our amended and restated certificate of
incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in
their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate
the terms of and issue new series of preferred stock, and the fact that prior completion of our initial business combination
only holders of our founder shares will have the right to vote on the election of directors, which may make the removal
of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing
market prices for our securities.
We are also subject to anti-takeover provisions
under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management
more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices
for our securities.
Since only holders of our founder
shares will have the right to vote on the election of directors, upon the listing of our shares on Nasdaq, Nasdaq may consider
us to be a ‘controlled company’ within the meaning of Nasdaq rules and, as a result, we may qualify for exemptions
from certain corporate governance requirements.
Only holders of our founder shares currently
have the right to vote on the election of directors. As a result, Nasdaq may consider us to be a “controlled company”
within the meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more
than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect
not to comply with certain corporate governance requirements, including the requirements that:
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we have a board that includes a majority of ‘independent directors,’ as defined under the rules of Nasdaq;
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we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing
the committee’s purpose and responsibilities; and
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We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of Nasdaq, subject
to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have
the same protections afforded to stockholders of companies that are subject to all of Nasdaq corporate governance requirements.
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Our directors may decide not to enforce
the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available
for distribution to our public stockholders.
In the event that the proceeds in the Trust Account are reduced
below the lesser of (i) $10.00 per share and (ii) the actual amount per share held in the Trust Account as of the date
of the liquidation of the Trust Account if less than $10.00 per share due to reductions in the value of the trust assets, in each
case net of the interest which may be withdrawn to pay taxes, and our Sponsor asserts that it is unable to satisfy its obligations
or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether
to take legal action against our Sponsor to enforce its indemnification obligations.
While we currently expect that our independent
directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible
that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do
so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high
relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent
directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution
to our public stockholders may be reduced below $10.00 per share.
We may not have sufficient funds to
satisfy indemnification claims of our directors and officers.
We have agreed to indemnify our
officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive (and
any other persons who may become an officer or director prior to the initial business combination will also be required to
waive) any right, title, interest or claim of any kind in or to any monies in the Trust Account and not to seek recourse
against the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account
due to their ownership of public shares). Accordingly, any indemnification provided will be able to be satisfied by us only
if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business combination.
Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our
officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the
likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might
otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the
extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
The securities in which we invest
the proceeds held in the Trust Account could bear a negative rate of interest, which could reduce the interest income available
for payment of taxes or reduce the value of the assets held in trust such that the per share redemption amount received by public
stockholders may be less than $10.00 per share.
The net proceeds of the Initial Public Offering
and certain proceeds from the sale of the Private Placement Warrants, in the amount of $276,000,000, are being held in an interest-bearing
Trust Account. The proceeds held in the Trust Account may only be invested in direct U.S. government securities with a maturity
of 185 days or less, or in certain money market funds which invest only in direct U.S. Treasury obligations. While short-term U.S.
government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates
in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee
of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States.
In the event of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any)
would be reduced. In the event that we are unable to complete our initial business combination, our public stockholders are entitled
to receive their share of the proceeds held in the Trust Account, plus any interest income. If the balance of the Trust Account
is reduced below $276,000,000 as a result of negative interest rates, the amount of funds in the Trust Account available for distribution
to our public stockholders may be reduced below $10.00 per share.
If, after we distribute the proceeds
in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of
punitive damages.
If, after we distribute the proceeds in the Trust Account to
our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed,
any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a
“preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover
all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty
to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public
stockholders from the Trust Account prior to addressing the claims of creditors.
If, before distributing the proceeds
in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and
the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in
the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent
any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection
with our liquidation may be reduced.
If we have not completed an initial
business combination within 24 months from the closing of the Initial Public Offering, our public stockholders may be forced
to wait beyond such 24 months before redemption from our Trust Account.
If we have not completed an initial business
combination within 24 months from the closing of the Initial Public Offering or during any Extension Period, the proceeds
then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released
to us to pay taxes (less up to $100,000 of the interest to pay dissolution expenses), will be used to fund the redemption of our
public shares, as further described herein. Any redemption of public stockholders from the Trust Account will be effected automatically
by function of our amended and restated certificate of incorporation prior to any voluntary winding up. If we are required to wind-up,
liquidate the Trust Account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation
process, such winding up, liquidation and distribution must comply with the applicable provisions of the DGCL. In that case, investors
may be forced to wait beyond 24 months from the closing of the Initial Public Offering or the expiration of any Extension
Period before the redemption proceeds of our Trust Account become available to them, and they receive the return of their pro rata
portion of the proceeds from our Trust Account. We have no obligation to return funds to investors prior to the date of our redemption
of public shares or liquidation unless we complete our initial business combination prior thereto and only then in cases where
investors have sought to redeem their Class A Common Stock. Only upon our redemption or any liquidation will public stockholders
be entitled to distributions if we do not complete our initial business combination.
Our stockholders may be held liable
for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held
liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The
pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the
event we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering
or during any Extension Period may be considered a liquidating distribution under Delaware law. If a corporation complies with
certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims
against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day
period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to
the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability
of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public
shares as soon as reasonably possible following the end of the 24th month after the closing of the Initial Public Offering
or the expiration of any Extension Period in the event we do not complete our initial business combination and, therefore, we do
not intend to comply with the foregoing procedures.
Because we will not be complying with
Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that
will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within
the ten years following our dissolution. However, because we are a blank check company, rather than an operating
company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims
to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan
of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating
distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed
to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the
dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As
such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no
more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the
pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in
the event we do not complete our initial business combination within 24 months from the closing of the Initial Public
Offering or during any Extension Period is not considered a liquidating distribution under Delaware law and such redemption
distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due
to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations
for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years,
as in the case of a liquidating distribution.
We may not hold an annual meeting
of stockholders until after the consummation of our initial business combination, which could delay the opportunity for our stockholders
to elect directors.
In accordance with Nasdaq corporate governance
requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following
our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders
for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of
such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial
business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting.
Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of a business combination, they may
attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c)
of the DGCL.
Holders of Class A Common Stock will
not be entitled to vote on any election of directors we hold prior to our initial business combination and, upon consummation of
our initial business combination, our initial stockholders will have certain rights to designate individuals for nomination for
election as directors.
Prior to our initial business combination,
only holders of our founder shares will have the right to vote on the election of directors. Holders of our public shares will
not be entitled to vote on the election of directors during such time. In addition, prior to the completion of an initial business
combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly,
you may not have any say in the management of our company prior to the consummation of an initial business combination.
We are not registering the shares
of Class A Common Stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time,
and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being
able to exercise its warrants except on a cashless basis. If the issuance of the shares upon exercise of warrants is not registered,
qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant
and such warrant may have no value and expire worthless.
We are not registering the shares of
Class A Common Stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this
time. However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later
than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts
to file with the SEC a registration statement for the registration under the Securities Act of the shares of Class A Common
Stock issuable upon exercise of the warrants and thereafter will use our commercially reasonable efforts to cause the same to
become effective within 60 business days following our initial business combination and to maintain the effectiveness of the
registration statement, and a current prospectus relating to the Class A Common Stock issuable upon exercise of the warrants,
until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we
will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set
forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein
are not current or correct or the SEC issues a stop order. If the shares of Class A Common Stock issuable upon exercise of
the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on
a cashless basis, in which case the number of shares of our Class A Common Stock that you will receive upon cashless exercise
will be based on a formula subject to a maximum number of shares equal to 0.361 shares of our Class A Common Stock per
warrant (subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we will not be
obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such
exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from
state registration is available. If that exemption, or another exemption, is not available, holders will not be able to
exercise their warrants on a cashless basis. Notwithstanding the above, if shares of our Class A Common Stock are at the time
of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a
“covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of
Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with
Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in
effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under
applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any
warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register
or qualify the shares underlying the warrants under applicable state securities laws and there is no exemption available. If
the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or
qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value
and expire worthless. In such event, holders who acquired their warrants as part of a purchase of Units will have paid
the full Unit purchase price solely for the shares of Class A Common Stock included in the units. If and when the
warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the
underlying securities for sale under all applicable state securities laws.
The warrants may become exercisable
and redeemable for a security other than the shares of Class A Common Stock, and you will not have any information regarding such
other security at this time.
In certain situations, including if we are
not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than the
shares of Class A Common Stock. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant
agreement, you may receive a security in a company of which you do not have information at this time. Pursuant to the warrant agreement,
the surviving company will be required to use commercially reasonable efforts to register the issuance of the security underlying
the warrants within 15 business days of the closing of an initial business combination.
If you exercise your Public Warrants
on a “cashless basis,” you will receive fewer shares of Class A Common Stock from such exercise than if you were to
exercise such warrants for cash.
There are circumstances in which the
exercise of the Public Warrants may be required or permitted to be made on a cashless basis. First, if a registration
statement covering the shares of Class A Common Stock issuable upon exercise of the warrants is not effective by the
60th business day after the closing of our initial business combination, warrant holders may, until such time as there
is an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the
Securities Act or another exemption. Second, if a registration statement covering the Class A Common Stock issuable upon
exercise of the warrants is not effective within a specified period following the consummation of our initial business
combination, warrant holders may, until such time as there is an effective registration statement and during any period when
we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the
exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available; if that
exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
Third, if we call the Public Warrants for redemption, under certain circumstances, warrant holders will be able to exercise
their warrants on a cashless basis. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise
price by surrendering the warrants for that number of shares of Class A Common Stock equal to the lesser of (A) the
quotient obtained by dividing (x) the product of the number of shares of Class A Common Stock underlying the warrants,
multiplied by the excess of the “fair market value” of our Class A Common Stock (defined above) over the exercise
price of the warrants by (y) the fair market value and (B) 0.361 per whole warrant, and the number of shares of our
Class A Common Stock received by a holder upon exercise will be fewer than it would have been had such holder exercised the
warrant for cash.
For example, if the holder is exercising
875 Public Warrants at $11.50 per share through a cashless exercise when the shares of our Class A Common Stock have a fair market
value of $17.50 per share when there is no effective registration statement, then upon the cashless exercise, the holder will receive
300 shares of our Class A Common Stock. The holder would have received 875 shares of our Class A Common Stock if the exercise price
was paid in cash. This will have the effect of reducing the potential “upside” of the holder’s investment in
our company because the warrant holder will hold a smaller number of shares of our Class A Common Stock upon a cashless exercise
of the warrants they hold.
Our initial stockholders hold a substantial
interest in us and will control the appointment of our board of directors until consummation of our initial business combination.
As a result, they will appoint all of our directors prior to our initial business combination and may exert a substantial influence
on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial stockholders own shares representing
approximately 15% of our issued and outstanding shares of common stock. Accordingly, they may exert a substantial influence on
actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and
restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any additional
shares of common stock in the market or in privately negotiated transactions, this would increase their control. Factors that would
be considered in making such additional purchases would include consideration of the current trading price of our Class A Common
Stock. In addition, prior to our initial business combination, our initial stockholders will have the right to appoint all of our
directors and may remove members of the board of directors for any reason. Holders of our public shares will have no right to vote
on the appointment of directors during such time. These provisions of our amended and restated certificate of incorporation may
only be amended by a resolution passed by a majority of the founder shares. As a result, you will not have any influence over the
appointment of directors prior to our initial business combination. Our board of directors is and will be divided into three classes,
each of which will generally serve for three years with only one class of directors being elected in each year. We may not
hold an annual meeting of stockholders to elect new directors prior to the completion of our business combination, in which case
all of the current directors will continue in office until at least the completion of the business combination. If there is an
annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will
be considered for election and our initial stockholders, because of their ownership position, will have considerable influence
regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the completion of our
initial business combination.
We are an emerging growth company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available
to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare
our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute
payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier,
including if the aggregate worldwide market value of our Class A Common Stock held by non-affiliates equals or exceeds $700.0 million
as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31.
We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some
investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities
may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices
of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private
companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of
securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The
JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply
to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended
transition period, which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.
Our amended
and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought
in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other
similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware,
the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel,
which may have the effect of discouraging lawsuits against our directors, officers, other employees or
stockholders.
Our amended and restated certificate
of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions
against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may
be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder
bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any
action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party
not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal
jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the
exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does
not have subject matter jurisdiction, or (D) any action created by the Exchange Act or any other claim for which the
federal courts have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of
our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated
certificate of incorporation. Unless we consent in writing to the selection of an alternative forum, the federal district
courts of the United States shall be the exclusive forum for any action arising under the Securities Act. This choice of
forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for
disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with
respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities
laws and the rules and regulations thereunder.
Alternatively, if a court were to find the
choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable
in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our
business, operating results and financial condition.
Our amended and restated certificate of
incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law,
subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to
enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum
provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which
the federal courts have exclusive jurisdiction. In addition, our amended and restated certificate of incorporation provides that,
unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America
shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of
action arising under the Securities Act or the rules and regulations promulgated thereunder. We note, however, that there is uncertainty
as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws
and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal
courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
General Risk Factors
We are a newly formed company with
no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
Because we lack an operating history, you
have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination
with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning
an initial business combination and may be unable to complete our initial business combination. If we fail to complete our initial
business combination, we will never generate any operating revenues.
Past performance by Hamilton Lane,
our management team, directors and their respective affiliates may not be indicative of future performance of an investment in
the company or in the future performance of any business we may acquire.
Information regarding performance by, or
businesses associated with, Hamilton Lane, our management team, directors and their respective affiliates is presented for informational
purposes only. Past performance by Hamilton Lane, our management team, directors and such affiliates is not a guarantee (i) either
of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate
for our initial business combination. You should not rely on the historical performance of Hamilton Lane, our management team,
directors or that of their respective affiliates as indicative of the future performance of an investment in the company or the
returns the company will, or is likely to, generate going forward. Hamilton Lane, our management team, directors and their respective
affiliates have had limited past experience with blank check and special purpose acquisition companies.
Cyber incidents or attacks directed
at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including
information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal.
Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive
or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently
protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate
any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse
consequences on our business and lead to financial loss.
We are subject to changing law and
regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the
risk of non-compliance.
We are subject to rules and regulations
by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight
of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts
to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general
and administrative expenses and a diversion of management time and attention from seeking a business combination target.
Moreover, because these laws, regulations
and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes
available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by
ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent
changes, we may be subject to penalty and our business may be harmed.